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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
GENERAL FORM FOR REGISTRATION OF SECURITIES
UNDER SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 333-168527
(Exact Name Of Registrant As Specified In Its Charter)
|(State of Incorporation)||(I.R.S. Employer Identification No.)|
|20 Raoul Wallenberg St reet , Tel Aviv, Israel||6971916|
|(Address of Principal Executive Offices)||(ZIP Code)|
Registrant’s Telephone Number, Including Area Code: +972-3-6130421
Securities to be registered under Section 12(b) of the Act: None
Securities to be registered under Section 12(g) of the Exchange Act: Common stock; $0.0001 par value
(Title of Class)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act) or a smaller reporting company.
|Large accelerated filer [ ]||Accelerated filer [ ]||Non-Accelerated filer [ ]||Smaller reporting company [X]|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
TABLE OF CONTENTS
|Item 1A.||Risk Factors||12|
|Item 2.||Financial Information||18|
|Item 4.||Security Ownership of Certain Beneficial Owners and Management||21|
|Item 5.||Director, Executive Officers and Key Employees||22|
|Item 6.||Executive Compensation||24|
|Item 7.||Certain Relationships and Related Transactions, and Director Independence||25|
|Item 8.||Legal Proceedings||25|
|Item 9.||Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters||25|
|Item 10.||Recent Sales of Unregistered Securities||26|
|Item 11.||Description of Registrant’s Securities to be Registered||26|
|Item 12.||Indemnification of Officers and Directors||29|
|Item 13.||Financial Statements and Supplementary Data||29|
|Item 14.||Changes in and Disagreements with Accountants on Accounting and Financial Disclosure||29|
|Item 15.||Financial Statements and Exhibits||29|
Background and Former Operations
Smart Energy Solutions, Inc. (the “Company” or “Registrant”) was incorporated in 1999 in the state of Utah under the name Datigen.com, Inc. On August 25, 2005, the Registrant was redomiciled from Utah to Nevada pursuant to a merger with and into its wholly-owned subsidiary, Smart Energy Solutions, Inc., a Nevada corporation and, in connection therewith, its name was changed to Smart Energy Solutions, Inc.
Prior to the merger into its wholly-owned subsidiary, the Company was engaged in activities including development and marketing of various internet and internet related products and services, investment in real property related instruments, and providing concrete cutting and finishing services to construction sites seeking to comply with certain provisions of the American Disability Act of 1991. In November 2004, the Company had a change in control as a result of the purchase of a majority of the Company’s outstanding common stock by unaffiliated individuals from certain of the Company’s shareholders, including its then Chief Executive Officer, Joseph Olivier.
In connection with the change in control, the Company determined to pursue other business opportunities and, as a result, on March 23, 2005, the Company acquired the intellectual property rights and certain other assets relating to a product known as the Battery Brain from Purisys, Inc., a New Jersey corporation in an Asset Purchase Agreement (the “Agreement”) with Purisys and Aharon Levinas, the owner of Purisys and the Battery Brain Assets (the “Assets”). The Battery Brain was a device attached to a motor vehicle battery for the purpose of protecting the vehicle from battery failure and theft.
Following the purchase of the Assets, the Company’s management team devoted its resources to establishing operations and entering into agreements with third parties for the manufacture and distribution of products using the Battery Brain technology, including manufacturers in China and Israel and distributors in the United States, Canada, Italy, and Israel. During the period from the date of the Agreement through the end of 2009, the Company devoted its marketing activities on the following target markets, each of which the Company believed had unique requirements: Automotive Retail; Automobile Dealers; Automotive OEMs; Automotive Specialty; Fleets; Military; Heavy Truck/Bus; Motor Home/Recreational Vehicle; and Marine.
Notwithstanding its sales and marketing efforts and its ability to generate sales revenues from its Battery Brain products, the Company continued to generate losses from operations and, as of its fiscal year-ended December 31, 2008, The Company had an accumulated deficit of in excess of $22 million. The Company continued to file reports under the Exchange Act through its quarterly report on Form 10-Q for the period ended September 30, 2009, during which three and nine-month period the Company reported Net Losses of $232,815 and $1,167,989, respectively. Also, at September 30, 2009, the Company lacked sufficient capital resources to continue to fund the expenses including professional fees associated with being a current, reporting company under the Exchange Act.
As a result, from and after the filing of its 10-Q for the period ended September 30, 2009, the Company ceased active business operations and its board of directors determined to devote its limited and depleting cash resources to seek operations that would generate more revenues and hopefully, positive cash flow from operations than its prior operations exploiting its Battery Brain technology. The Company became delinquent in its reporting obligations under the Exchange Act, failing to file its annual report on Form 10-K for the year ended December 31, 2009 and continued to be a delinquent filer until it filed a Form 15, terminating its registration under Section 12(g) of the Exchange Act on July 24, 2013.
Prior to filing the Form 15, the Company’s assets became subject to a proceeding before the Superior Court of the State of New Jersey, which resulted in the appointment of a receiver in early 2013. The principal creditor in that proceeding was Aharon Levinas, who had sold the Battery Brain Assets formerly owned by Purysis in the Asset Purchase Agreement dated March 23, 2005. On June 7, 2013, in connection with the order of the Superior Court of the State of New Jersey (the “Consent Order Approving Settlement”), the Court authorized and approved the sale, transfer and assignment of all of the Company’s assets to Aharon Levinas, free and clear of any liens, claims or encumbrances and granting Mr. Levinas effective control of the Company.
During November 2014 and March 2015, third-party investors acquired control of the Company by purchasing a control block of shares each holding 137,500 shares representing 88% of the Company’s issued and outstanding shares of common stock. Reference is made to the disclosure under “ Item 4. Security Ownership of Certain Beneficial Owners and Management.”
Recent Corporate Developments
On August 30, 2017, a new wholly-owned subsidiary was registered in Israel under the name of Canna Powder Ltd. (“CannaPowder Israel” or the “Subsidiary”), with 100 common shares outstanding, 0.01 NIS par value (the “Subsidiary Shares”), all of which were held in escrow on behalf of the Company by Israel attorney, Alon Nave. On September 27, 2017, pursuant to board resolution, the 100 Subsidiary Shares held in escrow were transferred to the Company.
The Subsidiary’s management includes Lavi Krasney, its CEO, and Rafi Ezra, its CTO. Reference is made to the disclosure under the subcaption “Key Employees” included in “Item 5. Directors and Executive Officers” below.
Development is being conducted at the Hebrew University under the supervision of the inventor of the technology, Professor Shlomo Magdassi, pursuant to the term of the Feasibility Study and Option Agreement dated September 14, 2017 (the “Feasibility Study”), a copy of which was attached as Exhibit 10.1 to the Company’s Form 10 filed with the SEC on April 30, 2018, as more fully discussed below.
On December 27, 2017, a board resolution was adopted to issue an additional: (i) 800 Subsidiary Shares to the Company; and an additional 100 Subsidiary Shares to Rafi Ezra and, as a result, effective December 27, 2017, Canna Powder Ltd became a 90% owned subsidiary of the Company and a minority interest of 10% owned by Rafi Ezra.
In anticipation of the formation of CannaPowder Ltd, the Company’s newly organized Israeli subsidiary, the Company began to raise capital through the private sale of its equity securities primarily pursuant to the exemptions provided under Regulation S promulgated by the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Act”) and, to a lesser extent, pursuant to Regulation D promulgated by the SEC under the Act (collectively, the “Equity Raise”). To date, the Company has raised approximately $ 1,226,900 in the Equity Raise. Reference is made to the disclosure under “Item 10. Recent Sales of Equity Securities” and “Note (7) Subsequent Events” in the Notes to Consolidated Financial Statements , below.
The Equity Raise by the Company was and continues to be for the purpose of funding the Company’s business involving its development program to establish cannabis powder production facilities utilizing the proprietary, licensed technology as more fully-described under “Intellectual Property” below (the “Development Program”). Pursuant to the Company’s Development Program, we expect to have product formulation and testing completed in 2020, pre-clinical studies commencing in 2021, first human and safety trials in 2022 and efficacy trials in 2023. As a result, unless we are able to expedite the above timetable, of which there can be no assurance, the earliest that we can expect to begin commercial sales will be 2023. In fact, there can be no assurance that the Development Program will be successfully implemented within our expected timeline notwithstanding the Company’s success in its Equity Raise to date, nor can there be assurance that the Company may not require additional capital to fully implement its business plan and complete production of commercially viable products based on its technology which is the subject of the Feasibility Study discussed below under “ Planned Research and Development and Current Trends .” Reference is also made to Appendix B-1 attached to the License Agreement filed as an exhibit to our Form 8-K filed with the SEC on May 25, 2018.
If and when we reach the commercial stage, of which there can be no assurance , the Company’s plan is to establish and operate several production facilities to be located in countries/ territories determined by the Company according to their size and provided that the applicable regulatory environment that permits studies applicable to other activities prerequisite to commercial exploitation of medical cannabis generally and the Company’s plan to develop cannabis-based powders for medical uses. The Company believes that it will be able to produce cannabis powders for medical uses at a cost advantage. Notwithstanding our belief in our ability to produce cannabis powders for medical uses at a cost advantage, in fact, to date we have not produced and cannabis powders for medical or any other uses and there can be no assurance that: (i) we will ever be able to produce commercially viable cannabis powders for medical uses; (ii) any cannabis we produce, either alone or in collaboration with third parties, will be accepted by the medical community, either in Israel or anywhere else in the world; (iii) any cannabis powders will be produced at a cost advantage; or (iv) we will be able to successfully compete with established companies in the medical cannabis industry, virtually all of which have far longer operating histories and far greater capital resources.
Planned Research and Development and Current Trends
We believe that there has been an increasing recognition amongst medical professionals conducting research in hospitals, including leading hospitals in Israel such as Hebrew University, Jerusalem, Israel and Sheba Academic Medical Center located in Tel Hashomer, Israel, among others, that the therapeutic effect of medical cannabis is due to the total number of cannabinoids working together. There is a scientific effort currently being conducted in Israel, as well as other countries, to analyze and understand how the various components within cannabis work, including ongoing scientific studies to develop separate medical components for use in treatment of different medical conditions using various components or combinations for each cannabinoid. Nevertheless, the laws of the United States presently do not permit studies to be conducted in hospitals in the U.S. notwithstanding approval of medical and recreation cannabis in 29 of the 50 states.
The aim of CannaPowder Israel is to identify the active pharmaceutical ingredient (API) and to endeavor to understand the cannabidiol (CBD) and tetrahydrocannabinol (THC) content of each product. Researchers, principally in Israel, have discovered approximately in excess of 100 cannabinoids, chemical compounds unique to the cannabis plant. The most common are CBD, cannabinol (CBN) and THC. CBN and THC interact with CB1 and CB2 receptors, which are located throughout the human
The above information was disclosed in a filing to the SEC. To see the filing, click here.
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Other recent filings from the company include the following:
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